Since Sherman Law Corporation and Schein Law Group published the landmark decision in Doe v. Second Street Corp. in September 2024, every California appellate court that has considered the EFAA has followed it without exception, holding that the Act covers continuing violations, voids arbitration agreements as to the entire case, and cannot be contracted around through a choice-of-law clause. Here is what that line of cases means for employees and employers today.
If you are an employee who signed an arbitration agreement on your first day of work or an employer who has relied on one for years, you may not realize how much the rules around sexual harassment claims have changed.
That changed in 2022 with the federal EFAA, but the real question was always how California courts would apply it. I’ve spent the last two years watching the answer unfold in real time because I was one of the attorneys representing the plaintiff in a landmark case.
In September 2024, Sherman Law Corporation and Schein Law Group represented plaintiff Jane Doe, a hotel employee, in the case entitled Doe v. Second Street Corp. 105 Cal.App.5th 552 (2024) (“Second Street”). The California Court of Appeal issued a published decision establishing the foundational rules for applying the EFAA in California. Here is what that decision held, what has happened in the courts since, and what it means for you right now.
What Doe v. Second Street established
The Court of Appeal in Second Street held:
- The EFAA covers continuing violations: When a plaintiff alleges sexual harassment that straddles the EFAA’s March 3, 2022, effective date (meaning some conduct occurred before and some after), the Act applies. A claim “accrues” on the date of the last harassing act, not the first.
- The EFAA covers the entire case, not just the harassment claims: The EFAA renders a pre-dispute arbitration agreement unenforceable with respect to the entire “case,” not just the sexual harassment counts. Wage claims, retaliation claims, and defamation claims are all exempt if the lawsuit relates to a sexual harassment dispute.
- Filing a motion to compel arbitration does not automatically stay proceedings: California Code of Civil Procedure § 1281.4 requires a party to separately move for a stay. It does not operate automatically upon filing a motion to compel.
- A claim accrues on the date of the last act: Congress imported the well-established “continuing violation” meaning of “accrue” into the EFAA, meaning harassment claims that span the EFAA’s effective date fall within its protection.
The Cases that followed Second Street
What happened next is remarkable. Every California appellate court to consider these questions has followed Doe v. Second Street without exception.
- Liu v. Miniso Depot CA, Inc., 105 Cal.App.5th 791 (2024) (“Liu”) was decided just one week after the Second Street” decision and was the first case to cite Second Street. The court expressly agreed with Doe’s reasoning that the EFAA’s plain language exempts a plaintiff’s entire case from arbitration where at least one sexual harassment claim is at issue, not just the harassment counts themselves. The California Supreme Court denied review.
- Casey v. Superior Court, 108 Cal.App.5th 575 (2025) (“Casey”) adopted both of Second Street’s core holdings: the continuing violation rule and the entire-case scope of EFAA unenforceability. Casey also broke new ground by holding that parties cannot contract around the EFAA through a choice-of-law clause selecting California law. The California Supreme Court denied review.
- Quilala v. Securitas Security Services USA, Inc., 117 Cal.App.5th 75 (2025) (“Quilala”) explicitly identified Second Street”, and Casey as “three pillars of a unanimous California rule,” noting that every published California decision to address the EFAA’s scope has reached the same conclusion. Quilala also confirmed that a plaintiff need not expressly invoke the EFAA by name; filing a complaint and opposing a motion to compel is sufficient to constitute an “election” under the statute.
- Decloedt v. Radnet Management, Inc., 2026 WL 1959641 (Cal. Ct. App. June 26, 2026) (“Decloedt”) decided June 26, 2026, is the most recent decision in this line. It extended the EFAA to cover harassment based on sexual orientation, holding that sexual orientation harassment is a form of harassment “because of sex” under California’s FEHA and therefore triggers the EFAA exemption. It applied the framework built on Second Street” and its progeny without any suggestion of controversy.
No California court has distinguished, limited, or declined to follow Second Street” The California Supreme Court has denied review in both Liu and Casey, signaling its acceptance of the unanimous appellate consensus. The influence of Second Street on California EFAA jurisprudence continues to stand the test of time.
The most significant federal decision on the EFAA is the Ninth Circuit’s recent decision inCombs v. Netflix, Inc., 140 F.4th 1201 (9th Cir. 2026) (“Combs”) In Combs, the Ninth Circuit addressed, as a matter of first impression in the circuit, when a sexual harassment dispute arises or accrues under the EFAA’s timing provision. The court held that the dispute arose and claims accrued before the EFAA’s March 3, 2022 effective date because the employee had repeatedly complained to her employer about a sexualized company culture and the employer had taken no action, and the dispute crystallized at the latest when the employer fired her before the EFAA’s effective date
Notably, Combs did not cite Second Street, even though both cases address the EFAA’s timing provision and the question of when a sexual harassment matter falls within the statute’s scope. The two decisions address related but distinct aspects of the EFAA: Second Street focused on the claim accrual prong under the continuing violation doctrine (holding that a continuing violation accrues on the date of the last act), while Combs focused on the dispute arising prong (holding that a dispute arises when the parties become adverse to one another through registered disagreement and employer opposition). The Ninth Circuit’s framework in Combs is not necessarily inconsistent with Second Street’s continuing violation analysis, but the two courts approached the EFAA’s timing question from different angles and reached different outcomes on their respective facts.
By holding that a dispute arises when the parties become adverse through registered disagreement and employer opposition, rather than when the underlying harassing conduct occurs, the Ninth Circuit established a framework that could, in some cases, result in EFAA inapplicability even where harassing conduct continued past March 3, 2022, if the dispute crystallized before that date. This creates a potential tension with Second Street’s continuing violation approach. A plaintiff whose harassment continued past the EFAA’s effective date might still be compelled to arbitrate under Combs if the dispute arose (i.e., the parties became adverse) before March 3, 2022, even though the claim would not have accrued until after that date under Second Street’s framework. The interplay between these two analytical frameworks is likely to generate further litigation in California courts.
What this means right now for Employers and Employees
For employees
As an employee, your lawsuit includes any adequately pleaded sexual harassment claim arising on or after March 3, 2022, or a continuing pattern of harassment that extended past that date; your employer cannot force any part of your case into private arbitration.
This includes wage claims, retaliation claims, discrimination claims, and any other causes of action filed in the same lawsuit.
For employers
A pre-dispute arbitration agreement provides no protection in any case where sexual harassment is adequately pleaded. This is not limited to your harassment counts; it covers the entire case.
What started as one hotel worker’s case in Los Angeles has quietly redrawn the limits of arbitration agreements across California employment litigation.
What do these developments mean for you?
1. I reside in California and signed an arbitration agreement with my California-based employer. Does the EFAA automatically void it?
Not automatically, but if your case includes a qualifying sexual harassment claim that arose on or after March 3, 2022, you can file suit and oppose a motion to compel arbitration by raising the EFAA.
2. The harassment started before March 3, 2022, and continued after. Does the EFAA still apply?
Yes, under the continuing violation doctrine, in Second Street, a hostile work environment claim accrues on the date of the last harassing act. If even one act occurred after the EFAA’s effective date, the entire continuing course of conduct falls within the Act’s protection. Timing questions in these cases are fact-specific and often determinative. Speak with an attorney before assuming the EFAA does not apply to you.
3. My case also has wage and hour claims. Are those covered too?
Yes. Under the entire-case rule established in Second Street and consistently applied by California courts to date, the EFAA voids the arbitration agreement as to all claims in the lawsuit, not just the harassment counts. Wage claims, retaliation claims, and defamation claims are all exempt if the case relates to a sexual harassment dispute.
4. Does it matter that harassment was based on sexual orientation rather than sex?
No. The recent decision in Decloedt v. Radnet Management confirmed that sexual orientation harassment is a form of harassment “because of sex” under FEHA and therefore constitutes a “sexual harassment dispute” that triggers the EFAA.
5. Our employment contract applies state law that favors arbitration. Does that permit the employer to compel arbitration?
No. Casey held that parties cannot contract around the EFAA through a choice-of-law provision. The EFAA preempts state law arbitration mechanisms where sexual harassment is alleged, regardless of what the contract says about governing law.
6. I am an employer. Should I still use arbitration agreements?
Arbitration agreements remain a useful tool in many employment contexts, but their limits in sexual harassment cases are now clearly defined and consistently enforced. A well-drafted agreement with a severability clause can still provide meaningful protection in other disputes. There are many other considerations when instituting arbitration agreements, which should be explored with counsel, such as the employer must pay all the costs and fees of arbitration, which can be exorbitant. Contact Sherman Law Corporation to determine if you should implement arbitration agreements at all, and if you do, that they are enforceable under the ever-changing laws.
Talk to a Los Angeles employment attorney at Sherman Law Corporation
If you are an employee who has been sexually harassed and have signed an arbitration agreement, its enforceability matters, as all plaintiffs want to litigate their claims to a jury, not an arbitrator.
If you are an employer who uses or wants to use arbitration agreements, the various considerations should be explored with experienced California counsel.
At Sherman Law Corporation, we don’t just follow this area of law; we shaped it. Contact our office at 323-488-2087 or at lisa@sherm-law.com to discuss your employment law matters.
